Trafigura completes first funding for committed prepayment portfolio fund worth US$155m

SWISS commodities trading giant Trafigura on Wednesday said it has completed the first funding for a US$155 million, closed-ended three-year committed prepayment portfolio fund.

The amount was raised through private equity and senior debt from banks including Lloyds Bank, Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank, and will be managed independently from Trafigura through its investment arm Galena Asset Management.

The fund will be used to purchase insured prepayments from Trafigura, which has its headquarters in Singapore, and will "(increase) Trafigura's ability to agree further prepayments with producing counterparties", the group said.

Trafigura uses prepayments to organise upfront loans for commodity-producing firms and are repaid over time in commodity shipments. Its current total prepayments for commodities including oil, metals and minerals exceed US$5 billion a year.

Galena's chief executive Maximilian Tomei said: "Our intention is to create a series of similar funds at a time when the business environment is rapidly evolving for the commodity trading industry."

The fund will introduce commodity-linked prepayments as a new asset class for investors, Mr Tomei added.